FXI Dividend Type Payments

iShares FTSE CHINA 25 INDEX FU dividend

Although FXI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on iShares FTSE CHINA 25 INDEX FU to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

iShares FTSE CHINA 25 INDEX FU (FXI)
Bid Ask Last Change Volume P/E Market Cap
40.78 40.87 40.78 -0.68 30.6M - 41B

FXI Dividend-Like Income Using Covered Calls

With FXI at 40.78, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield Annual Premium Cents/Day
3% 1.22 0.3
5% 2.04 0.6
10% 4.08 1.1

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On FXI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 43.00 0.02 5 0.4 2.13 (5.2%)
Nov 30 44.00 0.05 12 0.4 3.13 (7.7%)
5% Yield On FXI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 42.50 0.05 5 1.0 1.63 (4.0%)
Nov 30 43.50 0.09 12 0.8 2.63 (6.4%)
10% Yield On FXI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 42.00 0.10 5 2.0 1.13 (2.8%)
Nov 30 43.00 0.14 12 1.2 2.13 (5.2%)

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Want more examples? FXH Dividend | FXJP Dividend